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Pro Picks: 3 Small-Caps With Upside Potential

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On this episode of In the Money with Amber Kanwar, Andrey Omelchak, President, CEO & CIO at LionGuard Capital, breaks down one of the biggest shifts happening in markets right now. As AI fears hammer software valuations and once-untouchable names get cut in half, small and mid-cap stocks are quietly catching a bid. Andrey explains why he believes the market has overreacted in parts of software — but also why select small caps, defense plays, and “Build Canada” beneficiaries may offer stronger risk-adjusted returns from here.

This segment is brought to you by ATB Financial. With over $100 billion in assets, ATB Financial is powering possibilities for more than 843,000 financial services clients.  ATB Cormark Capital Markets is a leading North American investment firm providing holistic corporate and capital markets advice and full-service financial solutions. Visit www.ATB.com/inthemoney for more information.

Three small caps with big upside potential:

1. Calian Group
Defense-heavy contractor with multi-year government visibility.

  • More than 50% of the business is now defense and defense-related (cybersecurity, military training, NATO and Canadian forces contracts) — a direct beneficiary of Canada’s rapidly growing defense budget and “Buy Canadian” supply-chain policy.
  • Revenue growth guidance of 10–15% per year is viewed as achievable, with the defense segment delivering a higher margin profile, improving free cash flow conversion, and a healthy dividend.
  • Trades at a reasonable 20× earnings given the visibility; potential for multiple expansion as the market rewards the streamlined reporting and multi-year contract backlog.

2. Bird Construction

Pure-play Canadian infrastructure and engineering services company.

  • 100% Canada-focused with the most direct “Build Canada” exposure; backlog has surged more than 40% over the past 12 months and is arriving at materially higher margins.
  • Backlog quality is improving through partnership structures that reduce direct risk, setting up clear margin expansion and stronger free cash flow conversion going forward.
  • Transitioning to a higher-quality business with new safeguards on fixed-price work; multiple expansion from historical levels is expected as government infrastructure spending accelerates and execution missteps become far less material.

3. Canaccord Genuity

Capital markets and wealth-management franchise at an inflection point.

  • Capital markets division is firing on all cylinders — booming Australian investment banking, high-margin gold financings in Canada (aided by geopolitics and record gold prices), and the U.S. operation just beginning to wake up; wealth management in Canada and the UK continues to deliver strong asset growth.
  • In the best fundamental position in 15+ years of coverage; the UK wealth-management stake is expected to be monetized within the next 1–3 months (while management still controls the process), unlocking substantial embedded value.
  • Currently cheap on a sum-of-the-parts basis 

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DISCLAIMERS: This text AI generated and should be checked against actual delivery. The content provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice. The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. The host and guests may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial advisor or professional before making any investment decisions.

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